Varex Imaging entered into a credit and guaranty agreement, dated as of March 13, 2026, which includes a secured term loan facility in aggregate principal amount of $350 million, a secured revolving credit facility in aggregate principal amount of $100 million and a secured delayed draw term loan facility in aggregate principal amount of $40 million, providing for aggregate commitments of $490 million and maturing on March 13, 2031. Zions Bancorporation acted as lead arranger and bookrunner for the new credit facility and will act as the administrative agent and collateral agent. In connection with the closing, Varex irrevocably deposited funds with the trustee to redeem its $368 million aggregate principal amount of outstanding 7.875% senior secured notes due 2027, with the redemption to occur on March 16, 2026. Varex also terminated its previously existing $155 million revolving credit facility.
“We are excited to have successfully closed the new credit agreement and redeemed our senior secured notes, strengthening our balance sheet and improving our cost of capital,” Sam Maheshwari, chief financial officer of Varex Imaging, said. “We expect that the reduced debt and lower interest rate will improve financial flexibility, support improved free cash flow generation and enable continued investment in our core business while prioritizing long-term shareholder value.”
Borrowings under the credit agreement bear interest at a variable rate equal to the Secured Overnight Financing Rate (SOFR) plus an applicable margin, which is determined based on the company’s consolidated net leverage ratio. In connection with the financing, the company entered into an interest rate swap that effectively converts the variable SOFR component to a fixed SOFR of 3.65%. As of the closing of the credit agreement, the applicable margin is 2.50%.
In connection with the refinancing, the company used approximately $42 million of cash, consisting of an $18 million net reduction in outstanding debt, approximately $7 million in call premium paid to the Senior Secured Note holders, approximately $12 million of accrued interest on the redeemed notes, and approximately $5 million in transaction fees.
The refinancing is expected to reduce annualized cash interest expense by more than $7 million, reflecting lower interest rates and an $18 million reduction in outstanding debt.
